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Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

forbes.com

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Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#341

Post by tossandthrow »

hollerith wrote: post #336
fvvybfbfbyg wrote: post #328

Earlier quoted context omitted.

> or the Scandinavian countries that generally have higher spending power than the us. Do they? PPP they all have lower disposable income than the US and they are not even at the top in Europe (including social transfers). Germany, Switzerland, Austria and the Netherlands are above Norway and Sweden is even lower than France.

Also, Norway's PPP is as high as it is only because of North-Sea oil revenue.

that is used for a sovereign wealth fond. Norway produces less oil than the us.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#342

Post by hollerith »

tossandthrow wrote: post #341
hollerith wrote: post #336

Earlier quoted context omitted.

Also, Norway's PPP is as high as it is only because of North-Sea oil revenue.

that is used for a sovereign wealth fond. Norway produces less oil than the us.

Right, but the US has 60 times as many people. Norway's per capita oil revenue is very high.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#343

Post by gumby »

Rinzler89 wrote: post #306
gumby wrote: post #164

Earlier quoted context omitted.

> Today Palo Alto, Menlo Park, and other super zips are exclusively [A slight exaggeration] $500k incomes and up. In the 1960 census records you will find these good neighborhoods occupied with plumbers, painters and other blue collar workers. This was unfortunately a deliberate consequence of the dot com boom, not something that happened in previous tech booms. Until around 2000 Palo Alto actually had a lower median…

>PA used to be a town where the Grateful Dead, Jefferson Airplane, and the like got started. Harold and Maude was (partially) filmed here. But such things are now inconceivable. I remember how in the 80's and 90's there were still movies like Mrs. Doubtfire with characters on minimum wage renting in downtown San Francisco lol

In those days SF was a bedroom community for Silicon Valley. SF still had a thriving art scene and was worth living in — I made that commute for a while, thankfully carpooling with Larry McVoy.

Then in the same dot com boom…well that is well documented. People say SV grew up the peninsula and absorbed SF, but I prefer to think of it as SF was sacrificed as a honeypot.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#344

Post by agensaequivocum »

WA wrote: post #271
tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

- People lived in way smaller houses back then. - People had only one car. - People ate meat once per week. - People had way fewer things in their houses. You gotta consider increases in material possessions as well if you want to calculate inflation properly.

No people ate more meat and animal products.

https://twitter.com/Outdoctrination/status/16948423262110437...

https://twitter.com/Outdoctrination/status/16948423228723817...

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#345

Post by rayiner »

tossandthrow wrote: post #297
rayiner wrote: post #283

Earlier quoted context omitted.

> True fiscal conservatism would be all about social safety nets and free education to grow the economy Which is why Italy and France have such strong economies, right? What’s really standing in the way of economic growth is that the government isn’t paying for people to get free degrees in left wing studies.

or the Scandinavian countries that generally have higher spending power than the us. remember not to conflate a strong economy with an economy that is worth living in. you can possess minimum paid jobs in order to make profits for shareholders and never see a dime of that wealth yourself, but alas, you live in a strong economy.

I agree that you can’t conflate a strong economy with one worth living in. But OP was saying that we should invest in education for economic growth, and that doesn’t make sense. There’s trade offs to be made between growth and quality of life.

It’s not true Scandinavian countries have more spending power. The OECD keeps very detailed economic data. The US has the highest PPP disposable income in the OECD: https://www.statista.com/statistics/725764/oecd-household-di.... It’s about 67% higher than Sweden and Denmark.

Now you might say, but Swedes and Danes live longer and are happier. That’s true! But as far as I can tell, Americans would rather live shorter lives and have more TVs and trinkets. My parents came back from traveling in Australia. My mom was ranting for weeks about how small and close together the houses are and nobody can get really rich. We are immigrants from a third world country. All of my family members that have come here think that “making it” means living in a McMansion and driving an SUV. I don’t know if it’s something in the water, or the people who come here are just that way, or maybe a bit of both. But it’s worth contemplating that Americans are making rational choices based on their particular utility functions.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#346

Post by paulryanrogers »

rafaelero wrote: post #332
zarzavat wrote: post #317

Earlier quoted context omitted.

We’ve replaced a world in which women are forced to stay at home with a world where women are forced to work until 70 (or whatever the retirement age is in your country). Great if you’re an exec or have some mentally stimulating job, but for the typical woman it means stacking shelves until your back gives out. What an achievement for society.

That's what equality means and what they fought for.

There is more at play than simply equal rights. Housing supply hasn't risen to keep up with demand. Education and healthcare costs too have grown significantly compared to pregnant-and-barefoot-in-the-kitchen eras.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#347

Post by Dylan16807 »

wakawaka28 wrote: post #324
Dylan16807 wrote: post #276

Earlier quoted context omitted.

I think I misread something before I made that comment. Ignore the laughter. But even with that mistake, I don't know why you think I was calling inflation itself funny. - Though, you say the "money you worked so hard to earn"... I could interpret that as either wages or savings. If it means your wages buy 30% less, and inflation is 30%, then your nominal income hasn't increased. If so, something has gone very wrong,…

>If it means your wages buy 30% less, and inflation is 30%, then your nominal income hasn't increased. If so, something has gone very wrong, and it sounds like your employer is screwing you over. Employers use the fake numbers to determine adjustments. It's not like they are necessarily screwing you over if they don't give you a 30% raise due to inflation either lol. They have to come up with extra cash because of in…

> It's not like they are necessarily screwing you over if they don't give you a 30% raise

Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example.

> That's not a profit dude. It's the simple phenomenon of everything costing more. Since most businesses are hurt by inflation, stocks do not keep up with rapid inflation.

It wouldn't have to be a profit for my point to work.

But have you looked at stocks? The S&P 500 went up not just more than 30%, it went up more than 50%. Stocks did profit. And that's versus the relative peak. Any other baseline in the range of 4 years ago and the increase is even higher, and from 5 years ago it's up 75%.

> But that means the lender gets screwed. It is a dysfunctional situation.

You can't make everyone happy, but I was focusing on the experience of a relatively average person.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#348

Post by randomdata »

JumpCrisscross wrote: post #185
randomdata wrote: post #165

Earlier quoted context omitted.

> People use inflation as a gauge of COL. Which is interesting as you'd think actually living, and incurring the costs that go along with it, would be a much more useful gauge. Probably goes along with my suspicion that most people, especially those not already accounting for business activities, don't keep any meaningful record of their transactions. Hard to calculate COL without data. But at the same time, there is…

> you'd think actually living, and incurring the costs that go along with it, would be a much more useful gauge Not for a monetary authority. Given how much drama we have around even our Census Bureau, this gap makes sense. (Also, for every complaint about a given inflation gauge, one increases the parameter and thus bitchable space by orders of magnitude when it comes to COL.) > there isn't much effort in publishing…

> Not for a monetary authority.

We track this information, though. Anyone doing any economic-related work will be well familiar with the data. We just don't publicize in any grand fashion because who else needs to hear it? I'll grant you that people who write comments on the internet tend to be completely out to lunch, but most people have some kind of handle on their COL situation. They aren't going to learn anything they don't already know, so there is no reason to listen in. You need demand in order for supply to show up.

Inflation doesn't mean much to Average Joe either, to be fair, except it is a leading indicator of interest rates, and Average Joe does care about interest rates, so this is why Average Joe is listening for inflation information.

> But political leaders won’t.

The leaders are the people. The very same people.

If you are trying to imply that the leaders are as lazy about democracy as they are accounting, and are willing to let the hired help do whatever it wants because they don't want to ever have to take the time to talk to them, I'm with you. Not much you can do there. But if they don't care, nobody else is going to either.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#349

Post by paulryanrogers »

vineyardmike wrote: post #299
cpursley wrote: post #289

Earlier quoted context omitted.

The increase in housing prices are not at all proportional to these advancements in building techniques and materials.

It absolutely raises the “floor” of the housing costs - more materials simply means more costs. And the labor to do extra work means more costs - and quality labor is much more expensive today. Same reason a bigger house means more costs. I would posit - admittedly without data - that outside of major metros where land is the clear dominant cost, most costs for housing increase is labor. There are houses and empty lo…

Having worked near these neighborhoods the value you put in would be at a high risk. It's very possible you'll be assaulted, your home will be robbed, and the market value won't match the renovation costs.

All that said, some parts are gentrifying. Though mostly where developers can get large enough plots.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#350

Post by paulryanrogers »

dennis_jeeves2 wrote: post #236
tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

>It’s a deliberate approach to stealing your prosperity while you cheer it on. Excellent way to put it. To put things in perspective if one works for 5 days a week, you are paying the govt (all taxes + inflation) about 3 days of your earnings. You only get to keep what you earn for 2 days.

Does most of the inflation go to the government? Lately a significant portion seems to be going to the capital class and land owners.
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